The Round Rock City Council gave the first of two readings Thursday for raising the city tax rate and setting a $330 million city budget that includes an increase in city water rates next fiscal year.
The tax rate increase — from 42.5 to 43 cents per $100 property valuation — will mean most homeowners seeing an uptick of city property taxes in the coming year.
The proposed budget also includes a 3.5-percent increase in city water rates to maintain and improve water infrastructure and secure future water resources, city staff said.
If adopted in September, the tax rate would mean an average 10.2-percent increase in property taxes for residents due to increased home property values, said city Budget Manager Kevin Klosterboer. A homeowner with a median-priced home of $227,714 in Round Rock would pay $979 in property taxes in 2018 — an increase of $91 from last year.
Even with the proposed tax rate increase, the city would continue to have one of the lowest rates in Central Texas, said Susan Morgan, the city’s chief financial officer. The proposed budget and property tax increase allows the city to manage substantial local growth and pay off debt for voter-approved bond projects, she said.
The proposed city tax rate would raise 10.8 percent more in property tax revenue, or $5.2 million, than it did last year. The taxable property value in Round Rock for 2018 is $12.5 billion, up from $11.3 billion in 2017.
An estimated $46.9 million in sales tax collected by the city is projected to provide 45 percent of revenue for the city general fund, which is expected to be more than $110 million.
The proposed budget includes $40.8 million for roads, $23.8 million for utilities, $12.6 million for trail projects, $15.7 million toward a new public works facility, $12 million toward a new public safety center, $3.7 million for improvements at the Forest Creek Golf Club and $1 million for work on the new city main library.
The proposed budget also provides for 35 additional city staff positions.
A public hearing on the proposed tax rate is set for 5 p.m. Thursday at the council chambers on Main Street, with final adoption of the tax rate and budget scheduled for Sept. 14.